Facebook's liquidation value translates to $32 per share. Anyone that values it as less is excessively cautious. A company's liquidation value is the safest assessment because that's what investors would get in the event of a bankruptcy the second the bell rings on Friday morning. But since FB is setting an opening value of $38, it's building in an 18% increase, which basically robs the street of what would be in the initial first-day pop as we saw with Google. I agree with Stan, good short-term investment.

1:25 pm May 17, 2012

Dave wrote :

Noted re: Zillow IPO. If we look though at the IPO that's most similar we should look to linked in (LNKD) which opened at around $80 if I remember correctly and then shot up to $120. Personal opinion: probably worth riding the wave, because no matter what people are saying about the long term prospects of facebook (FB) there is a massive appetite for the stock. Dave the Cleaner http://www.carpetcleaningparramatta.org

2:04 pm May 17, 2012

Wall St Roadkill wrote :

Lesson: If you buy it, hedge it. Looks like this article is more of a pan on FINRA. News flash: "FINRA is a waste of time and creates more problems than it solves" -- thanks for the refresher on the obvious.

2:24 pm May 17, 2012

Finance Monkey wrote :

Re: Wall St Roadkill: exactly why is FINRA a waste of time?
Naive investors historically (at least since the dot-com frothiness of the early 2000s) put in market orders, overbought the securities, and got crushed. If an investor is ignorant about the newer regulations requiring limit orders on IPOs, they are exactly the ones who need protection from themselves.
Requiring investors to put in a limit order makes them think about the highest price that they are willing to pay. That is all. It does not prevent investors from buying the stock. And it does not prevent them from losing money. It just protects the most ignorant of investors. Not a horrible thing.

5:19 pm May 17, 2012

Tomas Martin wrote :

Im sorry...liquidation value is not 32 a share. If they file for bank, how would company be worth near 100 billion dollars? Good luck on this stock...it should be a lot of fun.

6:39 pm May 17, 2012

Maddogg wrote :

Heres everything you wanted to know about Facebook but were afraid to ask

Tomas, you are indeed correct regarding liquidation value. Castro, the liquidation value of the stock is no where near $32. Before the IPO, it's net worth was less than a billion as I recall. Right after the IPO it's net worth will not include the majority of IPO proceeds because investors in FB are selling somewhere around 240 million shares in the IPO. Guess where that money goes? Into the investors pocket, not into FB, the corporate entity. You might want to understand how an IPO works before saying an IPO is a good investment, and what it's liquidation value might be.

3:19 am May 18, 2012

jimmy wrote :

Castro, "robbing the street of an initial first day pop"? You're comparing the IPO price to a bogus liquidation number as how you the street is robbed of a first day pop? If anyone has any understanding of how the "Street" and thus investors are robbed of a first day pop based on what Fidel said, I would love to hear it. I would be forever indebted. The first day "pop" will be the closing price of FB tomorrow less the IPO price of $38. Google's IPO was structured entirely dfferent, and thus is not analagous to FB's IPO.

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